Thoughts on bankruptcy?

I did a little research here and found an old thread called "Help me about bankruptcy." I wonder if anyone has any more current advice? Do the people on that thread have any experience they can share? I, too, am confused about credit counseling/ financial planners/ bankruptcy attorneys. What do credit counselors actually do? Do financial planners only deal with people who are investing and saving? Do bankruptcy attorneys only deal with people wishing to declare bankruptcy? Do they try to come up with other options? I want to clear my debt, but I don't want to be pushed into bankruptcy. I'm not sure where to turn. I know it's a sensitive topic, so I thank anyone in advance for your helpful input.

struggling struggling
May '15

I have never been to a credit counselor but I believe they will look at your debt and see if they can consolidate it. Hopefully it will save you money every month so you can get ahead. I hope you get more replies here. We want to help you.

mansfield mama mansfield mama
May '15

There are real credit counselors, and then there are credit consolidators posing as credit counselors. Be very careful about who you get involved with. A true credit counselor should help you with your assets as well as your debts, liquidate some so you can pay bills, change your habits, and come up with a realistic plan to pay off the debt.

A credit consolidator is going to take all your loans and debts and take over them whether that's best for your or not. You then have only one payment to make, but you cannot get any more credit. It will negatively affect your credit score for a number of years. It is similar to a bankruptcy but you're getting a 3rd party company to handle your debt instead of a judge.

Most bankruptcy lawyers are going to tell you to just let them handle it all, and you need their services no matter what you do. It may be the right thing to do, but only if you can't come up with a plan you live up to and talking to your creditors doesn't work.

First steps are a plan where you match your income to your expenses, and then pay off your debts. That budget has to be both realistic and austere enough to be able to successfully pay off the debts. If you can't do the budget yourself, then a credit counselor, a real one and not a loan company posing as one, can help you budget.

If the assets you can sell and the income you allocate to paying debt can't pay the debts that's when bankruptcy may be something you have to do. A first step is to call all the creditors and negotiate. If you get too far behind and the negotiations end up in foreclosure, then you're definitely going to be seriously looking at bankruptcy.

So to the original question the start is at what stage are you? Do you have a plan? If you don't have a budget and a plan, then you need one ASAP. Paying off debt isn't going to happen if you don't have those. If you can pay but you're just not sure how to do that then that's a real credit counselor you want to get. How to get a real one? Certainly not the everyday ads you see everywhere, try going to your bank and telling them you want to pay your debts, you think you can, you just need help with how to plan. Most banks want to be paid so have such people available.


Hi Struggling!!!

Bankruptcy is an option but it is not always the answer. It is very important to have a very clear understanding of your finances. Do you have a budget? Are your expenses under control? Do you know were your money is going?

As a daily money manager, I help my clients manage their financial life. Wading through financial problems does take some time and planning but ultimately you will be better educated about your finances and will avoid being in the same position again.

Wishing you all the best!!!

Joe C. Joe C.
May '15

Also read about the difference between filing chapter 11 or chapter 13 there are a lot of restrictions that you may not want to happen , good luck

Cowgirl1 Cowgirl1
May '15

Do it - ch 7 if you qualify - just make sure that your creditor matrix includes Everything possible - realize your back taxes and student loans are not forclosable and be ready to make an "offer in compromise" use it as it was intended - a one time chance to get back on track. You will get credit offers the month the discharge is final - refuse them and get debt free. Debit is slavery

skippy skippy
May '15

If it's credit card's you owe, sometimes a credit card company will negotiate down what you owe them. It's taxable however. So for example if you owe $10k and you tell them you're hardships, they may take the balance down to like 7k. Since they "gave" $3k , you have to report it on you're tax return. It's worth a try to negotiate with all your creditors. If you tell them you're going to go bankrupt, they would rather get something than nothing at all. Good luck and I really hope you can work things out. I know how stressful this mess can be.

sallysimpson sallysimpson
May '15

Have you made a detailed budget of ALL your expenses? If not, start with this...


hi, i have done this and my advice is skip the credit councelors, they lower your payents which still affects your creddit. Get a good lawyer and do a chapter 7, nost people dont know you can kepp your house if you have one your cars etc, your credit will hurt for about 2 years but you can start over, very easily, id be happy to talk to you about your case if you want, joe 908-798-0660, i know this topic well, alot of it is based on your situation

jt 16 jt 16
May '15

I have done it twice. First time was Chapter 7 by myself and the second time was Chapter 13 with my husband (this is where you pay a trustee once-a-month for five years. We only had to pay $100/month. We were able to keep our house. You debts are wiped clean and you get a fresh start. We used Joan Lavery in Hackettstown. You can go there for a free consultation. Good Luck!

Done That Done That
May '15

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